4 Internet Stocks Poised to Top Estimates This Earnings Season

The third-quarter 2025 earnings season is underway, with several Internet companies already reporting their results. Early trends reveal multiple growth catalysts, including monetary easing, technological innovation, and strong corporate fundamentals, which created favorable conditions for Internet stocks throughout the quarter, despite concerns about elevated inflation and ongoing policy uncertainty.

Drawing on our proprietary research and market insight, we’ve identified four stocks — Unity Software U, BILL Holdings, Inc. BILL, Arista Networks ANET and Lyft LYFT — that appear well-positioned to beat earnings estimates this season.

Performance of Some Internet Players So Far

This is evident from the strong results delivered by Alphabet GOOGL and Meta Platforms META. Alphabet's third-quarter results benefited from AI-driven growth in Search, while YouTube and cloud businesses boosted top-line growth. The introduction of AI Overviews and AI Mode has driven growth in overall queries, including commercial queries. It is creating opportunities for people to connect with businesses and shop on search. Google Cloud backlog jumped 46% sequentially, with AI products seeing 200% annual revenue growth.

Meta Platforms' third-quarter performance benefited from higher advertising revenues and an expanding user base. AI recommendations boosted Facebook time by 5% and Instagram video viewing by more than 30%.

Prospects of Internet Stocks

Several powerful positive forces are expected to have propelled Internet stocks during the third quarter of 2025, with AI enthusiasm and Federal Reserve interest rate cuts serving as primary catalysts. The central bank's shift toward monetary easing following evidence of a cooling labor market is expected to have reduced borrowing costs and support equity valuations, thereby enhancing investor risk appetite for high-growth technology companies. This accommodative monetary environment represented a fundamental tailwind for Internet platform valuations after a period of tighter financial conditions.

Digital advertising revenue strength is expected to have remained a crucial driver for sector heavyweights, contingent upon continued resilience in the U.S. consumer and broader economic environment. The expansion of the digital advertising market is being fueled by digitalization, growing consumer demand for online content consumption, and innovation in AI-based advertising offerings, with programmatic advertising and advanced targeting capabilities enhancing campaign effectiveness. Even amid economic uncertainty, companies are anticipated to have shifted advertising spending from traditional channels like newspapers to digital platforms, particularly social media, retail media, and search advertising.

The ongoing AI infrastructure buildout, characterized by substantial capital investments in machine learning capabilities, likely fueled impressive earnings growth across the technology sector in the third quarter. Investor enthusiasm for companies deeply integrated into the burgeoning AI ecosystem is anticipated to have provided sustained momentum for communication services and Internet platform stocks. Additionally, the integration of live streaming with e-commerce platforms is expected to have created powerful growth opportunities, as brands increasingly utilize real-time video to showcase products and create immersive shopping experiences, with mobile device proliferation and social commerce driving adoption.

The easing of trade tensions between the United States and its trading partners was expected to lift a significant drag on markets, as reduced tariff threats would alleviate pressure on earnings expectations and cross-border supply chains. Social media platforms were projected to capture increasing shares of advertising budgets, with spending on social media ads demonstrating robust growth momentum as marketers recognized their effectiveness in consumer engagement.

However, concerns about elevated inflation levels and ongoing policy uncertainty represented significant risk factors. A weakening labor market, combined with uncertainty surrounding U.S. fiscal deficit and trade policy, created additional headwinds for investor confidence. 

Intensifying antitrust scrutiny from global regulators presented ongoing challenges, with U.S. authorities pursuing high-profile cases against Google, Meta, Apple, and Amazon, while AI partnerships faced investigation regarding potential anticompetitive implications. The European Union's Digital Markets Act and similar regulations worldwide imposed significant compliance burdens and potential fines on major platforms, forcing companies to divert resources from innovation to legal defense and regulatory compliance.

How to Make the Right Pick?

With the presence of several industry participants, finding the right software stocks with the potential to beat on earnings can be daunting. Our proprietary methodology, however, makes this task fairly simple.

You could narrow down your choices by looking at stocks that have the perfect combination of two key elements — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. 
 
Earnings ESP is our proprietary methodology for determining stocks that have the maximum chances of beating estimates in their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
 
Our research shows that for stocks with this favorable mix of ingredients, the odds of a positive earnings surprise are as high as 70%.

Best Bets

Given below are four Internet stocks that have the favorable combination to beat on earnings this reporting cycle:

Lyft is scheduled to report third-quarter 2025 results on Nov. 5. The company currently has an Earnings ESP of +5.50% and a Zacks Rank #2. Upcoming results are expected to reflect strong momentum from record-breaking second-quarter performance in gross bookings, adjusted EBITDA, and free cash flows. Strategic partnerships with major brands, including Baidu, United Airlines, Chase, and DoorDash, which now contribute approximately 25% of rides, should drive robust growth, while the FREENOW acquisition expands Lyft's total addressable market into Europe. The transformative Waymo autonomous vehicle partnership, emphasizing profitability and margin contribution, positions Lyft favorably in the emerging AV market. With active riders reaching record levels and new rider growth accelerating double-digits year over year for consecutive quarters, investors can expect solid execution. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for earnings has remained steady at 30 cents per share in the past 30 days. 

Lyft, Inc. Price and EPS Surprise

Lyft, Inc. price-eps-surprise | Lyft, Inc. Quote

BILL Holdings is scheduled to report third-quarter 2025 results on Nov. 6. The company currently has an Earnings ESP of +0.85% and a Zacks Rank #2. The company is benefiting from accelerating momentum in its digital payment platform. The company is likely to have benefited from continued expansion in its small and medium-sized business customer base, alongside increasing transaction volumes as digital payment adoption deepens. Strategic integrations with accounting software partners should have driven user engagement, while cross-selling initiatives for embedded financing and spend management solutions may have enhanced revenue per customer. The resilient performance of BILL's core AP/AR automation offerings, combined with operational efficiency gains, positions the company favorably. Investors will watch closely for sustained growth in key metrics and forward guidance strength.

The Zacks Consensus Estimate for earnings has remained steady at 51 cents per share in the past 30 days. 

BILL Holdings, Inc. Price and EPS Surprise

BILL Holdings, Inc. price-eps-surprise | BILL Holdings, Inc. Quote

Arista Networks is scheduled to report third-quarter 2025 results on Nov. 4. The company currently has an Earnings ESP of +4.17% and a Zacks Rank #3. The company has raised 2025 revenue guidance to 25% growth, and $8.75 billion demonstrates accelerating momentum, driven by surging AI networking demand that positions the company to exceed $1.5 billion in AI-related revenues for the full year. Market traction in 200-gig and 400-gig high-performance switching products, combined with continued leadership in enterprise datacenter solutions powered by the EOS operating system, should support margin expansion. The VeloCloud acquisition enhances end-to-end networking capabilities and strengthens the company's SASE portfolio, while strategic investments in India's AI centers of excellence reflect expanding international opportunities. With a consistent track record of earnings beats, Arista appears well-positioned to exceed expectations again.

The Zacks Consensus Estimate for earnings has remained steady at 72 cents per share in the past 30 days.

Arista Networks, Inc. Price and EPS Surprise

Arista Networks, Inc. price-eps-surprise | Arista Networks, Inc. Quote

Unity Software is scheduled to report third-quarter 2025 results on Nov. 5. The company currently has an Earnings ESP of +3.03% and a Zacks Rank #3. Unity Software is positioned for another strong quarter, with third-quarter 2025 revenue guidance of $440-$450 million supported by continued momentum in its Unity Ad Network, particularly the Unity Vector AI advertising platform, which drove 15% sequential growth in the second quarter. The Grow segment should see mid-single-digit sequential expansion as Unity Vector now represents approximately half of total advertising revenues, with expectations for further growth. The Create segment's strategic revenues are anticipated to show high single-digit year-over-year improvement, bolstered by Unity 6's robust adoption and major partnerships with industry leaders, including Tencent, Scopely, and Nintendo. With adjusted EBITDA projected at $90-$95 million and 83% adjusted gross margins, Unity's improving operating leverage and disciplined cost management should drive continued margin expansion and strong cash generation.

The Zacks Consensus Estimate for earnings has remained steady at 17 cents per share in the past 30 days.

Unity Software Inc. Price and EPS Surprise

Unity Software Inc. price-eps-surprise | Unity Software Inc. Quote

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research